The innovation value chain

My colleague Cees Sprenger gave me an article by Morten Hansen and Julian Birkinshaw on the innovation value chain (the HBR-article was translated for the Dutch HMR. Their article is based on findings of five large research projects on innovation they undertook the last ten years. They say that:

• … organisations that want to be better at innovation, too often start with idea generation and plan one of those brainstorm-sessions. Whereas, they say, the problem is often not generating good ideas but rather bringing them further. Therefore they propose a value chain consisting of three phases: idea generation, idea conversion, and idea diffusion.
• … organisations cannot allow themselves to be active only at one phase of the value chain. They should be aware of the whole process. It is not about generating as much ideas as you can but about connecting the ideas to further development and to the outside world.
• … organisations need to focus on the weakest link in the value chain instead of the strongest (as they quite often do). The authors offer all kinds of attractive ways to work on these weakest links (like building safe havens for emerging concepts).

Some of my reflections:

• Focussing on the weakest link runs counter to the idea of working from strengths. I think where the two meet, is in the individual. The organisation’s policy or culture might be pointed at one or two stages of the value chain, but I believe that the individuals represent the whole value chain. Some people like generating ideas, others like to think of ways to make an idea work. So it is not so much focussing at your weakest link but rather looking for the individuals that are passionate about the phase of innovation the organisation itself is not naturally working on.
• The focus of their article lies on product innovation. A product is something that can literally be distributed. How would the situation differ in organisations whose primary ‘product’ for their customers consists of services (see for instance the PhD research of Anna van Poucke (2005), she looked at knowledge intensive service firms and divides the innovation process into three phases: Idea generation, Crystallization, and Evolution). A service is not something that can be literally distributed.

References:

• Hansen, M.T., Birkinshaw, J. (2007). The Innovation Value Chain, Harvard Business Review, 85 (6), 121-130.
• Van Poucke, A. B. M. (2005). Towards radical innovation in knowledge-intensive service firms. Erasmus Universiteit Rotterdam, Rotterdam.